haidi: a very good morning and welcome to "bloomberg daybreak: australia." shery: good evening from new york. the top stories. the biden administration tightens entry curves. haidi: hong kong lists locked

down restrictions on a district while warning they will be reimposed to tackle the virus if needed. or than 10,000 people were affected. australia's infection rates continue to fall. the aussie dollar rises in expectation. haidi: it is a sign of being bullish. on account of the optimism regarding the travel and quarter restrictions being lifted. kiwi stocks -- we do have trading but no schedule because of a public holiday. sydney stocks, future showing a rise suggesting we will see a modest upside. this after u.s. stocks fell from record highs on friday. the s&p 500 dropping for the first day out of water sessions.

-- out of four sessions. shery: the u.s. passing another milestone in the year-long struggle against covid. total infections exceeded 25 million. about 8% of the total population. a slowing confusing vaccine rollout has frustrated billions of people prompting the biden administration to promise to accelerate the pace. what are we expecting to hear from today's white house meeting with a bipartisan group of senators on the biden relief plan? >> that meeting will be closed to the press but we will get readouts. if anything, republicans like the $1.9 trillion proposal. they want the effort to be paired down and focused more on the neediest cases.

that would be some help to those that are unemployed and a shoring up of the vaccination program. we heard from mitt romney today who said that if you get the vaccination program running and you cut down on the coronavirus cases, than the economy will come along on its own merits. this is more of a mainstream republican view and i think that is what the white house economic direct air heard today. haidi: we heard confirmation that the biden administration is planning to be a part of the global effort to distribute vaccines around the world. how do we stand when it comes to biden and the promise of 100 million shots in 100 days? >> depending on who you listen to, it is a worthy goal that can be reached or is not ambitious

enough. when you listen to the incoming surgeon general, they say it is not a ceiling. they hope to do that at the very minimum. i think probably given what we have heard in recent days about distribution problems and production, that they are looking at the approval of the next two vaccines in america including johnson & johnson and astrazeneca, that would go a long way to increasing supply but it could be weeks away. that would be the next big thing. definitely, the biden administration has serious plans if they can roll them out about how to back -- about how to distribute the vaccine better. and also the issue of the defense production act. one thing we got from the white

house chief of staff today is that they may feel they are a little behind be a ball but they are pushing ahead towards their 100 million goal. shery: in australia, the vaccine rollout is expected to begin next month despite concerns over the tightening supply. we just heard that this is the health care and pharmaceuticals that had provisionally approved the pfizer vaccine. what does it mean when you look at the relative success the country has had in controlling the virus versus the sense of urgency of getting people vaccinated? >> the group has taken a cautious approach. there was an outbreak in sydney right before christmas so the

timeframe to get this done was brought forth from march of to february on concerns that australia was on the verge of another major outbreak. it did not end up happening. there are concerns over the shortage of pfizer vaccines. shipments being scaled back due to renovations at the factory in belgium. jabs expected to begin by the end of february. the virus more broadly seems to be coming under control again. there has been no new cases in new south wales for a few weeks now. haidi: a patchwork of internal border restrictions changing again. what is the latest? paul: it is getting hard to keep up with this. travelers from new south wales and queensland no longer need to

get exemptions to enter but you still need to quarantine for two weeks on entry to western australia. victoria has reopened most of sydney as well. it has its own traffic light system. the new south wales premier has criticized that calling it confusing. every time case number's flareup. worth mentioning -- new zealanders were opposed to the trials to control the outbreak but it just recorded its first case of community transmission in two months. it illustrates how hard it is to control these flareups. haidi: the latest from paul allen in sydney. and in hong kong, the lockdown of that densely populated district has ended. officials found 13 positive cases. they visited more than 3000

apartments with no answer at almost 500. the government says residents can go to work and resume normal activities from monday. shery: getting to more analysis of the complexities of the rollout of the vaccine with leslie russell. for now, let's get over to karina mitchell. >> the world economic forum opens this week virtually as the coronavirus prevents face-to-face meetings. the chinese president will deliver the keynote address with an urge to look beyond the pandemic and focus on climate change and the new normal. the founder says the event should build fresh momentum. china has sent warplanes into the taiwan strait in what is being seen as a challenge to the new u.s. administration. it entered -- they entered the

southern airspace followed by other planes. the uss theodore roosevelt and its strike group entered the south china sea in what are described as routine operations. indonesia has seized an oil tanker suspected of illegally transferring crude in its waters. iranian and panamanian vessels were detained. they are accused of failing to display national flags and a legally moving oil between ships. the iranian media big knowledged one tanker had been stopped. 11 people have been rescued from a gold mine in china two weeks after they were trapped by an explosion. they were pulled out one by one. one minor reported to have died in the blast. chinese mining industry has improved safety and the last few years. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i am karina mitchell. this is bloomberg. haidi: still ahead, camera is reportedly open to a meeting with beijing. we will be discussing all of this with the former ambassador to china. coming up next, stimulus hopes continue to drive the market. but dialing back optimism for the recovery. this is bloomberg. so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

haidi: jeremy grantham is sounding the alarm on stocks again. he is now predicting that joe biden economic recovery plan will take stocks to a perilous high followed by a perilous crash. >> covid brought in spectacular

excesses on the part of the fed and the government writing checks. and i say excessive, perhaps it was necessary but in any case, it was unprecedented in the combination was very powerful. without covid we cannot know. the market resisted opportunities to bubble earlier in this 11 year cycle. it looked like it was getting pretty close three years ago and then it fizzled away. the confidence dissipated. the market had a decline. and those bull markets can go on forever and you don't know how long or how high they can go. it is the birth of euphoria that typically brings these things to an end and we are seeing that all around us today. shery: year make great -- jeremy grantham speaking to our colleague eric chester.

brett ewing joins us from tallahassee, florida. the gg feed chart on the bloomberg showing the as of the 500 together with the fed balance sheet. you put the year-end target at 4150 from the current level so we are expecting more gains from here but how concerning is it that we are seeing this one side trade when it comes to all of this exuberant optimism? brett: thank you. yes, in the short run, we are taking the position that we feel the risk reward is skewed towards a very high level what we mean by that is we are not expecting any big market crash but we just had the most historical run-up to the inauguration day of president buying. we feel there is a lot of technical indicators that are really getting stretched. the put to call ratio.

other sentiment indicators out there. when i look at the russell 2000 four emerging markets, for example, i feel going into the next 30 days, 30-45 days that we do expect corrections somewhere between 5%-7%. haidi: you mentioned the russell 2000. we have rallied a lot when it comes to small caps. what about the lofty expectations and the valuations that we are at right now for the smaller companies? brett: yes, since the election, all through december, we have been trimming down into the strength our small and mid cap. we feel that cash right now is a good position. and gives us a lot of flexibility over the next 30-45 days. i think if there is any disappointment that comes out of congress, the 117th

congressional convening here, i think that will throw a lot of volatility on these markets. what i mean by that is if they are not coming through on the stimulus bill or the covid bill or the infrastructure fizzles, i feel a lot of that is being factored in here. haidi: we're seeing a lot of exuberance from the emerging markets that have benefited from a number of things. the green index that bloomberg tracks is at the highest in a decade. what opportunities are you see in em that could be ambivalent to some of these changing possibilities that are yet to play out for the rest of the year? brett: longer-term, i want to be clear, we do like the small and mid cap arena and emerging markets, but in the short term,

i think you will have a much better entry-level into the emerging markets. we like the south america and latin markets a lot here. we don't have a specific position in those markets. haidi: in terms of where you see the u.s. dollar going from here, do you anticipate some of the strength that we have seen since the election is a short-term blip and the longer term is u.s. dollar weakness? brett: yes. we do believe longer-term the dollar is going to continue its trend down as specially if we get the infrastructure and more stimulus and along with the fed keeping their foot on the pedal with the bond buying and pumping money into the economy. i do believe in the short run though that you could have a little rally over the next 45 days with the dollar.

nothing significant. i think that would do a lot of damage and set up for a nice correction in emerging markets and the small-cap index. shery: and what about commodity pricing? they have severed their biggest drop since october and analysts are already calling for a super cycle when it comes to commodities. brett: yes, we do like commodities. i think if you believe the dollar will continue its slow trend down in the next year, i believe having some exposure into commodities is a good ring and will deliver some outputs here. shery: when it comes to the expectations of economic recovery and how it will affect the market, what are your thoughts about when the fed will need to get back into the markets and take action again? we expect fed officials to meet again for the first time since the democrats took over the

senate. we expect some sort of acknowledgment, when will they need to act if we see this acceleration in inflation expectations and asset prices as well as the economic recovery? brett: i think with the fed's new policy stance of letting inflation get ahead, the massive change they made back in september, i do believe they will let inflation get out there before they do anything. they do have a meeting this week. we are not expecting any major policy changes. we think it will be along the lines of powell's earlier comments in january that they remain very supportive and accommodative. but i do believe that at some point there is going to be a change in language. and i believe we will have a large amount of volatility with

that event. and whether that is in 8-12 months or 18 months out remains to be seen but it is an event that we will certainly be paying attention to. haidi: brett ewing chief market analyst at first franklin financial services. breaking news -- reporting from reuters. more on the blackstone deal. we had heard earlier reports that we are now hearing that there is a $7.3 billion deal. they are nearing a deal that could be announced on monday. this is a u.s. benefits provider. we are hearing from reuters of a 7.3 billion dollar deal including debt. and it does highlight how much it has become an investment

target. it creates a lot of cost savings and benefits for companies. but also, given that we have to did -- but also come it does potentially underline how viable and alternative vehicle is if the -- if blackstone is doing this. tensions escalate as australia responds to google threat to remove it search engine. we have the details of that topic just ahead. this is bloomberg. ♪

haidi: australia says it is inevitable that google and other tech giants will eventually have to pay for, -- content. google has threatened to disable it search engine in australia. let's get the details from our reporter.

what do we know? >> good morning. the spat spilled over on friday when google's managing director appeared at a panel here and made a clear threat that the -- that if the legislation goes forward in its current form, they will disable the search engine in australia. it was a clear threat and delivered as such. the prime minister on friday took issue with that and said australia does not respond to threats. and the rules australia makes applies -- apply to those in australia. and over the weekend, officials said it is inevitable. and the tech giants did a

disservice by issuing this threat. it is difficult to say where it will go from here. scott morrison and the government -- digital giants making it clear that if they go ahead, the search engine will be disabled and in facebook's case, news articles won't be shared. shery: what impact could this have in other countries following suit? the european union is already scrutinizing big tech. angus: that is an important part of this opposition from google. it sets an untenable position for the company. if google has to pay publishers to display snippets in other

markets, then it starts to become -- australia is not a major market. there are 19 million google customers. but it does in one sense draw a line in the sand if the legislation goes forward in its current form and that is what google opposes at least in some parts. this president -- this precedent. analysts say this has been set for other regulators around the world and if google accepts this, it is a concern what might happen in other more important jurist actions. shery: our business reporter in sydney. and a quick check of the latest headlines. a china do look -- developer aims to raise nearly $3 billion in a share placement with six investors.

shares would be issued at a percent discount. the investors have agreed to a 12 month lockout period. every gland wants to be the largest maker of electric cars. a chinese start up -- as cornerstone backers of an ipo in hong kong. we are told it hopes to raise about 6 billion u.s. dollars from the deal. it could be the biggest internet ipo since uber two years ago. haidi: coming up next, we speak to a former australian ambassador to china, dr. geoffrey raby. this is bloomberg. ♪

karina: you are watching daybreak australia. the u.s. is tightening entry restrictions to non-americans extending curbs on people traveling from europe, u.k., brazil and south africa. joe biden's press secretary said now is not the time to ease any measures. the news comes as infections top 25 million with global cases almost four times that number. hong kong has listed lockdown restrictions. the unprecedented restrictions

affected about 10,000 people after more than 160 cases were reported in the first three weeks of the new year. at least 700 people are currently in hospital in hong kong with 38 in critical condition. the aussie dollar strengthened in early trading in the anticipation virus restrictions will be eased. new south wales reported no locally transmitted infections for a seventh straight day. western australia is to relax its policy. travelers will still have to test and isolate on arrival. violence broke out in a southern dutch city as riot police tried to clear an illegal protest against lockdown. police arrested at least 30 people and say more than 3000 others have been fined for

breaching curfew on saturday night. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. shery: the chinese president speaks at the world economic forum on monday. he will be among the top world leaders to participate in the six day online event. tom mackenzie has the details from beijing. a lot to discuss this year. what will top the agenda at the virtual summit? tom: this will be the second time a chinese leader has addressed the world economic forum. this year in virtual form. it was preceded by a speech by president xi jinping in 2017 when he was the first chinese leader to address world economic forum when he traveled to davos and pushed back against trade wars.

that shortly after the surprise election of than president donald trump. president xi jinping will give a speech again. this time, we are looking for anything he is going to say about the new administration in the united states. anything he hints at in terms of the relationship between beijing and washington that continues to be plagued by multiple areas of tension. he may also address the relative success china has had in tackling covid-19 even as there are new clusters in beijing. also attempts by china to push its own vaccine not just domestically but overseas as well. there will be a sense and a focus on anything president xi jinping says about climate change and the commitment by china to be carbon neutral by 2060. the speech coming after there was reporting by the wall street journal suggesting chinese officials were trying to set up a meeting between senior leaders , potentially a visit by member

of the bureau to ease tensions with the biden administration. the chinese embassy and in the u.s. has said those reports are not true. letters were not written to try to facilitate those talks. it points to how those sides are going to try to renegotiate this relationship or find a window of opportunity to start talks. haidi: speaking of a hope to renegotiate the relationship, muted hopes we may see a reset in the tensions between china and australia. we are seeing more and more australian coal end up in chinese territory. geoff: there is a hope among -- tom: there is a hope amongst traders that tensions between canberra and beijing will ease. we already have 70 cargo vessels off the coast of china with about 1400 seafarers and thousands of tons of calls.

6.4 million tons of coal waiting. the chinese authorities are not letting the cold to be unloaded. the buyers are not allowing the vessels to leave. it is a form of firtash of purgatory. shipped -- it is a form of purgatory. ships keep leaving with coal. the question is why is that happening? there is a massive price differential between the coal you can buy in china versus the coal youn aulia, which is much cheaper. a one hundred thousand ton cargo of coal will cost you about 14 million u.s. dollars compared to 28 million if you were to buy the same product in china. that is an example of why traders are holding out hope there will be an easing of tensions and they will be available to unload that.

it is still viable to see the shipments set off the coast of china. there has been a suggestion they are considering allowing and excepting cargo that arrived before the ban. that is something else investors are looking at. shery: tom mackenzie in beijing with the latest. we are going to stick with kim bro. scott morrison is willing to meet president xi jinping only if there are no conditions according to the o's trillion newspaper. it's discuss the tensions -- let's discuss the tensions between beijing and canberra. ambassador, always great to have you with us. we heard from scott morrison saying he would be willing to meet with president xi jinping. there may be a naive hope the biden reset in that relationship could mean a reset for canberra as well particularly as we have we have -- as we have a new

trade minister. is more required to reset the relationship than this ambivalent statement about we will have a meeting but no real change in strategy from either party? geoff: i think that is right. the prime minister has said he will take a phone call from xi jinping. we are prepared to talk, that sort of thing. i think we are stuck. most likely everyone is going to wait and see what happens with the biden administration and how it deals with china and whether it does provide a possibility for australia. haidi: given that in the past we have seen a lack of visits or visitations being extended for australian ministers to go into

china, what is required here? i guess we spoke to the former prime minister recently and said a managed strategic approach needs to be taken. what does that look like for canberra? geoff: the policy has to be consistent and applied in a deliberate and coordinated way. it does not involve making statements. the prime minister made a good statement about recognizing china's role in the region. it was a good signal to china from the australian prime minister. went to tokyo and met with the new prime minister and that was signaling to china that australia was going to work with countries like japan who continue to push back on china. that is where the policy lacks

consistency. i think the prime minister is going to that very point. what they are looking for is some signal from washington there is some change in washington's overall approach to china. we have had a lot of talk from washington in the last couple years about containment of china. unfortunately, australia has identified itself very closely with those positions. i think that is why beijing is being so tough in dealing with australia. haidi: how crucial is joe biden's reapproach to australia going to be? kurt campbell in his administration. what does that look like in his administration and how does that change the dynamic for beijing? geoff: biden himself in his

article in the run-up to the election talked about strategic competition with china and strategic cooperation. we have not had any discussion of cooperation between the u.s. and china. i think biden already has indicated a change in policy and a change in approach. that provides the opportunity for something of an offramp. the u.s. is going to have to find ways to work closely with beijing on some of the big issues. climate change clearly is a big shift in washington's international posture. washington will have to work with beijing in a cooperative way. beijing will have to work with washington. the whole atmosphere and dynamic is set for a change. i think the u.s. will try to

prolong intentions. if it is not in the u.s.'s own interest. the rhetoric at home will change, but i thing the substance will change. australia will have to recalibrate its own positions. shery: the question is, how soon will be u.s. be able to boost these alliances and change the approach to china? we have heard about multilateralism, alliances and even democratic alliances against and pushing back against beijing, but how soon? >> i think -- geoff: i think the u.s. alliance in east asia is very strong. i do not think a lot of work has to be done in those alliances. the u.s. presence is still very strong. what has to happen is there needs to be some greater trust

between beijing and washington so that beijing does not feel threatened by various actions the u.s. might take. democratic alliances -- washington needs to be careful about that because it can be quickly seen again as efforts to contain china. the u.s. will have trouble putting together such a coalition. so on christmas eve -- you saw on christmas eve the europeans signed a bilateral investment agreement with china. that was a clear signal for the e.u. to navigate its own relationship with china. shery: that was really interesting, just before the biden administration took office. it would be the economic interest the europeans have and putting into question what sort of alliance to push back against china. what you think of the effort by the united states especially in

the tech battle for supremacy, trying to contain the rise of chinese companies like huawei. we know australia has backed that strategy, but is this feasible? geoff: it is not feasible. i think this is one of the points where the u.s. will see in its own interest decoupling or trying to contain china. it is not going to deliver outcomes the u.s. would hope. while way is the digital backbone across the whole of eure -- huawei is a digital backbone across the whole of eurasia. the world is a lot bigger than just the pacific and u.s. and china relations. it is quite interesting. we were the first and for a long time the only country that has a comprehensive ban on huawei.

that is an example of how australia has overreached in trying to align itself with u.s. policies of resisting china. what we are dealing with -- and i deal with myth -- with this in my book at length is the world's greatest power ship that has happened. countries are trying to position themselves in the new order that has emerged. shery: it will be a very tricky world order to navigate. ambassador, always great having your thoughts. geoff raby, former ambassador to china. we do have breaking news at the moment. we are hearing from the hong kong economic journal that kuaishou is seeking to raise up to five point $4 billion in hong kong ipo. this would offer the shares to

115 hong kong dollars. each in that hong kong ipo. they are offering 365 million shares according to the hong kong economic journal. this is a chinese video start up. bloomberg has learned they have drawn blackrock and apple dobby's investment -- and abu dhabi's investment arm. the hong kong economic journal reporting they are seeking to raise up to $5.4 billion in that ipo. coming up next, the engine asian presidencies the economy rebounding. we hear exclusively from the finance minister about the risks that remain. this is bloomberg. ♪

haidi: time now for morning calls ahead of the asian trading day. we are looking at u.s. bonds. janet henderson says markets are heading a point where treasuries are starting to look attractive. they say the 1.2 point -- the 1.25% is a good level. it does not mean inflation will follow. haidi: goldman saying they have -- strategist think cyclical stocks still have room to gain. we have the democratic majority in washington. they say this has not been fully

reflected in the markets. they point out some of these other assets to look out for. including emerging markets fx as well as opportunities in higher credit. indonesia's president expects the economy to rebound this year after the pandemic forest at the first recession in -- pandemic forest the first recession in two decades. speaking exclusively to bloomberg, she says the growth target of 5% is achievable. >> the second quarter, [indiscernible] recovery can be accelerated. the vaccine is giving hope and optimism. we are still very much expecting

[indiscernible] >> you seem hopeful indonesia can grow at 5%. how are you taking into account europe where we are seeing christine lagarde saying it is at risk of a double-digit recession and china, which is expected to post strong growth for 2021? >> we have the risk of china. it can fully the economy globally. it is already affecting. [indiscernible] that will be reflected in terms of the activity of the exports. [indiscernible] credit growth is still very slow

because they are cautious about the nonperforming loans. there is a compensation overall. we are hopeful of the second quarter. i understand [indiscernible] a tough quarter for 2021. we are hoping entering 2021 we want to see a recovery that will continue. [indiscernible] they see the reality it cannot be 100% controlled. >> what does it mean for your budget deficit currently standing at 5.7%? does it take into account the

vaccine peak care met? does it take into account the tax revenue? >> we can still import a strong discipline as i can also see from 2020. this is despite that indonesia estimated 6.3 percent. and also despite the fact that revenue has been under huge pressure. you can see the national revenue has declined by 16.7%. also suffered with a decline of 19.6%. it is quite a pressure from the revenue side. we also see the commodity price increase and some of export activity has been normalized. that will give us additional revenue in the last four months of 2020.

>> we saw the swing in investor confidence in indonesia last year. that was apparent in the movement of the indonesian rupiah. your experience has provided a lot of stability. what are you hearing from investors, some of the things they may be worried about indonesia? >> indonesia despite this pandemic -- recognize this country has a lot of potential to offer. we also recognize we have [indiscernible] in order for us to be able to formulate what is the most important policy for us to be able to first realizing this potential and second addressing our program. that is why the reform including

the creation -- [indiscernible] shery: the indonesian finance minister. we do have an alert on the bloomberg. the korean democratic party is seeking to have another round of cash handouts to all citizens. this will be the fourth cash handouts since the pandemic began. this will be not only tall citizens but also compensating small businesses for losses from the shutdown. not to mention because of the social distancing rules. we have seen a resurgence of coronavirus cases in south korea. the latest count did show the smallest gain in almost nine weeks when it comes to those infections. to get a roundup of the stories you need to know, go to

davie go under terminal. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. australia is raising the heat on big tech, warning it is inevitable google, facebook and other platforms will have to pay

for using news content. treasurer josh fight and berg was responding to google's threat to remove the search engine. india says domestic aviation is nearing pre-covid levels with more than a quarter of people -- quarter of a million people flying on friday. that compares to 30,000 in may. the civil aviation ministers says indian carriers are within touching distance of pre-pandemic levels. haidi: the market open in australia is coming up. these are the stocks we are watching. taking a look at one in particular. these ongoing trade tensions between beijing and china. 70 couple ships stuck. -- 70 coal ships stuck. we see those prices in iron ore falling.

they have had a hefty run-up. that should be pointed out. lots more to come. we have the market open in sydney next. we are expected to see modest upside when we start cash trading in sydney. this is bloomberg. ♪

haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. asia looks set for a cautious start as investors away the fed's first meeting of the year and balance earnings against the worsening pandemic. the biden administration tightens entry curbs on travelers from the u.k., europe and brazil as u.s. vires